Major market indexes had a tough December, culminating in a final thrust lower on Christmas Eve. But when we woke up on Boxing Day things had changed. That day started a run higher in equities that continues to today and into its sixth week. Yet most market indexes are still under their 200 day SMA. It was a deep cut.
The Dow Jones Industrial Average (DJIA) is the one exception. It was the first index to push over its 200 day SMA, closing above it on Friday and continuing higher on Monday. This is a good first step in a recovery, but it is still far short of making a high enough advance to claim a recovery.
The chart above shows the path both down and up, the familiar “V” shaped recovery we saw in 2016. It also shows the prospects are good for more upside in the DJIA. The Bollinger Bands® are pointing higher. The momentum indicators are rising and bullish.
The RSI is strong in the bullish zone with room to continue up and the MACD is positive and moving higher. A good start, but it needs to move over 26,000 before we can move back from the edge of our seats.
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